Industrial Property

The broad application of the term “industrial” is clearly set out in the Paris Convention for the Protection of Industrial Property (Article 1 (3)): “Industrial property shall be understood in the broadest sense and shall apply not only to industry and commerce proper, but likewise to agricultural and extractive industries and to all manufactured or natural products, for example, wines, grain, tobacco leaf, fruit, cattle, minerals, mineral waters, beer, flowers, and flour.”

Industrial property takes a range of forms, the main types of which will be outlined in this note. These include patents to protect inventions; and industrial designs, which are aesthetic creations determining the appearance of industrial products. Industrial property also covers trade marks, service marks, layout-designs of integrated circuits, commercial names and designations, as well as geographical indications, and protection against unfair competition. In some of these, the aspect of intellectual creation, although existent, is less clearly defined. What counts here is that the object of industrial property typically consists of signs transmitting information, in particular to consumers, as regards products and/or services offered on the market. Protection is directed against unauthorized use of such signs likely to mislead consumers, and against misleading practices in general.

Patents for Inventions

Most laws dealing with the protection of inventions do not actually define the notion of an invention. A number of countries, however, define inventions as new solutions to technical problems. The problem may be old or new, but the solution, in order to merit the name of invention, must be a new one. Merely discovering something that already exists in nature, such as a previously unknown plant variety, is not an invention. Human intervention must be added. So the process for extraction of a new substance from a plant may be an invention. An invention is not necessarily a complex item. The safety pin was an invention which solved an existing “technical” problem. New solutions are, in essence, ideas, and are protected as such.

Thus protection of inventions under patent law does not require that the invention be represented in a physical embodiment. Patents, also referred to as patents for invention, are the most widespread means of protecting the rights of inventors. Simply put, a patent is the right granted to an inventor by a State, or by a regional office acting for several States, which allows the inventor to exclude anyone else from commercially exploiting his invention for a limited period, generally 20 years. By granting an exclusive right, patents provide incentives to individuals, offering them recognition for their creativity and material reward for their marketable inventions. These incentives encourage innovation, which in turn contributes to the continuing enhancement of the quality of human life. In return for the exclusive right, the inventor must adequately disclose the patented invention to the public, so that others can gain the new knowledge and can further develop the technology. The disclosure of the invention is thus an essential consideration in any patent granting procedure. The patent system is so designed as to balance the interests of inventors and the interests of the general public.

The word patent, or letters patent, also denotes the document issued by the relevant government authority. In order to obtain a patent for an invention, the inventor, or the entity he works for, submits an application to the national or regional patent office. In the application the inventor must describe the invention in detail and compare it with previous existing technologies in the same field in order to demonstrate its newness. Not all inventions are patentable. Laws generally require that an invention fulfil the following conditions, known as the requirements or conditions of patentability:

Industrial Applicability (utility). The invention must be of practical use, or capable of some kind of industrial application.

Novelty. It must show some new characteristic that is not known in the body of existing knowledge (referred to as prior art) in its technical field.

Inventive step (non-obviousness). It must show an inventive step that could not be deduced by a person with average knowledge of the technical field.

Patentable subject matter. The invention must fall within the scope of patentable subject matter as defined by national law. This varies from one country to another. Many countries exclude from patentability such subject matter as scientific theories, mathematical methods, plant or animal varieties, discoveries of natural substances, methods for medical treatment (as opposed to medical products), and any invention where prevention of its commercial exploitation is necessary to protect public order, good morals or public health.

The conditions of novelty and inventive step (non-obviousness) must exist at a certain date, generally the date on which the application is filed. There is an exception to this rule, covered by an applicant’s right of priority, regulated by the Paris Convention for the Protection of Industrial Property. This exception relates only to applications made in countries party to the Paris Convention. The right of priority means that, having filed an application in one member country of the Paris Convention, the same applicant (or his successor in title) may, within a specified time period, apply for protection for the same invention in any of the other member countries. These later applications will be regarded as if they had been filed on the same day as the earliest application.

For example, if an inventor first files an application for patent protection in Japan, and later a second application, with respect to the same invention, in France, it is sufficient that the conditions of non-obviousness existed at the date on which the Japanese application was filed. In other words, the later, French application retains priority over any applications relating to the same invention filed by other applicants between the date of the inventor’s first and the second application. This is subject to the period between the two dates not exceeding 12 months.

It is customary to distinguish between inventions that consist of products and inventions that consist of processes. The creation of a new alloy is an example of a product invention. The invention of a new method or process of making a known or new alloy is a process invention. The corresponding patents are usually referred to respectively as a product patent and a process patent. The person to whom a patent is granted, is known as the patentee, the owner of the patent or the patent holder. Once a patent has been granted with respect to a particular country, anyone who wishes to exploit the invention commercially in that country must obtain the authorization of the patentee.

In principle, anyone who exploits a patented invention without the patentee’s authorization commits an illegal act. The protection is granted for a limited period, generally 20 years. Once a patent expires, the protection ends, and the invention enters the public domain. The patentee no longer holds exclusive rights to the invention, which then becomes available for commercial exploitation by others. The rights conferred by a patent are not described in the patent itself. Those rights are described in the patent law of the country in which the patent is granted. The patent owner’s exclusive rights generally consist of the following:

in the case of a product patent, the right to prevent third parties without the owner’s consent from making, using, offering for sale, selling or importing for these purposes the product; and

in the case of a process patent, the right to prevent third parties without the owner’s consent from using the process; and to prevent third parties from using, offering for sale, selling or importing for these purposes the products which were obtained directly by that process.

The patentee is not given a statutory right to exploit his own invention, but rather a statutory right to prevent others from commercially exploiting it. He may give permission, or grant a licence, to other parties to use the invention on mutually agreed terms. The patentee may also sell his right to the invention to someone else, who will then become the new owner of the patent. There are certain exceptions to the principle that a patented invention cannot legally be exploited without the authorization of the owner of the patent. These exceptions take into account the balance between the legitimate interests of the patentee and those of the general public. Patent laws may provide for cases in which a patented invention may be exploited without the patentee’s authorization, for example, in the wider public interest by or on behalf of the government, or on the basis of a compulsory licence.

A compulsory licence is an authorisation to exploit the invention given by a governmental authority. It is generally issued only in very special cases, defined in the law, and only where the entity wishing to exploit the patented invention is unable to obtain the authorization of the owner of the patent. The conditions regarding the granting of compulsory licenses are regulated in detail by laws that provide for them. The decision to grant a compulsory license must provide for an adequate remuneration of the patentee. The decision may be the subject of an appeal.

Utility Models

While not as widespread as patents, utility models are also used to protect inventions. Utility models are found in the laws of more than 30 countries, as well as in the regional agreements of the African Regional Industrial Property Organization (ARIPO) and the Organisation Africaine de la Propriété Intellectuelle (OAPI). In addition, some countries, such as Australia and Malaysia, provide for titles of protection called innovation patents or utility innovations, which are similar to utility models. Other countries, like Hong Kong, Ireland and Slovenia, have a short-term patent that is equivalent to the utility model.

The expression “utility model” is simply a name given to a title of protection for certain inventions, such as inventions in the mechanical field. Utility models are usually sought for technically less complex inventions or for inventions that have a short commercial life. The procedure for obtaining protection for a utility model is usually shorter and simpler than for obtaining a patent. Substantive and procedural requirements under the applicable laws differ to a large extent among the countries and regions that have a utility model system, but utility models usually differ from patents for invention in the following main respects:

The requirements for acquiring a utility model are less stringent than for patents. While the “novelty” requirement must always be met, that of “inventive step” or “non-obviousness” may be much less or even absent altogether. In practice, protection for utility models is often sought for innovations of a rather incremental nature, which may not meet the patentability criteria.

The maximum term of protection provided by law for a utility model is generally shorter than the maximum term of protection provided for a patent for invention (usually between 7 and 10 years).

The fees required for obtaining and maintaining the right are generally lower than those for patents.

Industrial Designs

An industrial design, in general terms, is the ornamental or aesthetic aspect of a useful article. This aspect may depend on the shape, pattern or colour of the article. The design must be able to be reproduced by industrial means; this is the essential purpose of the design, and is why the design is called industrial.

In a legal sense, industrial design refers to the right granted in many countries, pursuant to a registration system, to protect the original, ornamental and non-functional features of a product that result from design activity. Visual appeal is one of the main factors which influence consumers in their preference for one product over another. When the technical performance of a product offered by different manufacturers is relatively equal, consumers will make their choice based on price and aesthetic appeal. So in registering their industrial designs, manufacturers protect one of the distinctive elements that determine market success.

By rewarding creators for their effort in producing new industrial designs, this legal protection also serves as an incentive to invest resources in design activities. One of the basic aims of industrial design protection is to stimulate the design element of production. This is why industrial design laws usually only protect designs that can be used in industry or that can be produced on a large scale.

This condition of utility is a notable difference between industrial design protection and copyright, since the latter is only concerned with aesthetic creations. Industrial designs can generally be protected if they are new or original. Designs may not be considered new or original if they do not significantly differ from known designs or their combinations. In most industrial design laws, designs that are dictated solely by the article’s function are excluded from protection. If the design for an article produced by many manufacturers, such as a screw, is dictated purely by the function that the screw is intended to perform, then protection for that design would have the effect of excluding all other manufacturers from producing items intended to perform the same function. Such exclusion is not warranted, unless the design is sufficiently novel and inventive to qualify for patent protection.

In other words, the legal protection offered by industrial designs concerns only the design that is applied to, or embodied in, articles or products. This protection does not prevent other manufacturers from producing or dealing in similar articles or products, as long as these do not embody or reproduce the protected design. Industrial design registration protects against unauthorized exploitation of the design in industrial articles. It grants the owner of the design the exclusive right to make, import, sell, hire or offer for sale articles to which the design is applied or in which the design is embodied.

The term for an industrial design right varies from country to country. The usual maximum term is from 10 to 25 years, often divided into terms requiring the proprietor to renew the registration in order to obtain an extension of the term. The relatively short period of protection may be related to the association of designs with more general styles of fashions, which tend to enjoy somewhat transient acceptance or success, particularly in highly fashion-conscious areas, such as clothing or footwear.

Intellectual Property with regard to Integrated Circuits

The question of the type of protection to be granted to the layout design or components of electrical circuitry that have been used for a long time in the manufacture of electrical equipment (such as radios), has been resolved with the large-scale integration of a multitude of electrical functions in a very small component which in turn became possible, as a result of advances in semiconductor technology. Integrated circuits are manufactured in accordance with very detailed plans or layout designs. The layout designs of integrated circuits are creations of the human mind. They are usually the result of vast investment, of both expertise and financial resources. There is a continuing need for the creation of new layout designs that reduce the dimensions of existing integrated circuits and simultaneously increase their functions. The smaller an integrated circuit, the less material is needed for its manufacture, and the smaller the space needed to accommodate it. Integrated circuits are used in a wide range of products, including articles of everyday use, such as watches, television sets, washing machines and cars, as well as sophisticated computers and servers.

Whereas creating a new layout design for an integrated circuit involves a major investment, it is possible to copy such a layout design for a fraction of that cost. Copying my be done by photographing each layer of an integrated circuit and preparing masks for the production of the integrated circuit on the basis of the photographs obtained. The high cost of the creation of such layout designs and the relative ease of copying are the main reasons why layout designs need protection.

Layout designs of integrated circuits are not considered to be industrial designs in the sense of the laws providing for the registration of industrial designs. This is because they do not determine the external appearance of integrated circuits, but rather the physical location, within the integrated circuit, of each element with an electronic function. Moreover, layout designs of integrated circuits are not normally patentable inventions, because their creation usually does not involve an inventive step, although it requires a great deal of work by an expert. Further, copyright protection may not apply if national law determines that layout designs cannot be protected by copyright.

In response to the uncertainty surrounding the protection of layout designs, the Treaty on Intellectual Property in Respect of Integrated Circuits was adopted under WIPO’s auspices on May 26 1989. The Treaty has not entered into force but its substantive provisions have, to a large extent, been incorporated by reference in <The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), which was concluded in 1994.

Trade Marks

A trade mark is a sign, or a combination of signs, which distinguishes the goods or services of one enterprise from those of another. Such signs may use words, letters, numerals, pictures, shapes and colours, as well as any combination of the above. An increasing number of countries also allow for the registration of less traditional forms of trade mark, such as three-dimensional signs (like the Coca-Cola bottle or Toblerone chocolate bar), audible signs (sounds, such as the roar of the lion that precedes films produced by MGM), or olfactory signs (smells, such as perfumes). But many countries have set limits as to what may be registered as a trade mark, generally allowing only signs that are visually perceptible or can be represented graphically. A trade mark is a sign used on goods or in connection with the marketing of goods. The trade mark may appear not only on the goods themselves but also on the container or wrapper in which the goods are sold. When used in connection with the marketing of the goods the sign may appear in advertisements, for example in newspapers or on television, or in the windows of the shops in which the goods are sold.

In addition to trade marks identifying the commercial source of goods or services, several other categories of marks exist. Collective marks are owned by an association, such as an association representing accountants or engineers, whose members use the mark to identify themselves with a level of quality and other requirements set by the association. Certification marks, such as the Woolmark, are given for compliance with defined standards, but are not confined to any membership. A trade mark used in connection with services is called a service mark. Service marks are used for example by hotels, restaurants, airlines, tourist agencies, car-rental agencies, laundries and cleaners. All that has been said about trade marks applies also to service marks.

Broadly speaking, a trade mark performs the following four main functions. These relate to the distinguishing of marked goods or services, their commercial origin, their quality and their promotion in the market place:

To distinguish the products or services of one enterprise from those of other enterprises. Trade marks facilitate the choice to be made by the consumer when buying certain products or using certain services. The trade mark helps the consumer to identify a product or service which was already known to him or which was advertised. The distinctive character of a mark has to be evaluated in relation to the goods or services to which the mark is applied. For example, the word “apple” or the image of an apple cannot distinguish apples, but it is distinctive for computers. Trade marks do not only distinguish products or services as such, they distinguish them in their relationship to an enterprise from which the products or services originate.

To refer to a particular enterprise, not necessarily known to the consumer, which offers the products or services on the market. Thus trade marks distinguish products or services from one source, from identical or similar products or services from other sources. This function is important in defining the scope of protection of trade marks.

To refer to a particular quality of the product or service for which it is used, so that consumers can rely on the consistent quality of the goods offered under a mark. This function is commonly referred to as the guarantee function of trade marks. A trade mark is not always used by only one enterprise, since the trade mark owner may grant licenses to use the trade mark to other enterprises. It is accordingly essential that licensees respect the quality standards of the trade mark owner. Moreover, trading enterprises often use trade marks for products that they acquire from various sources. In such cases, the trade mark owner is not responsible for producing the products but rather (and this may be equally important) for selecting those that meet his quality standards and requirements. This argument is supported by the fact that even where the trade mark owner is the manufacturer of a particular product, he may frequently use parts which have not been produced by him, but which have been selected by him.

To promote the marketing and sale of products, and the marketing and rendering of services. Trade marks are not only used to distinguish or to refer to a particular enterprise or a particular quality, but also to stimulate sales. A trade mark that is to fulfil that function must be carefully selected. It must appeal to the consumer, create interest and inspire a feeling of confidence. That is why this function sometimes is called the appeal function.

The owner of a registered trade mark has an exclusive right in respect of his mark. It gives him the right to use the mark and to prevent unauthorized third parties from using the mark, or a confusingly similar mark, so as to prevent consumers and the public in general from being misled. The period of protection varies, but a trade mark can be renewed indefinitely on payment of corresponding fees. Trade mark protection is enforced by the courts, which in most systems have the authority to block trade mark infringement.

Trade Names

Another category of industrial property covers commercial names and designations. A commercial or trade name is the name or designation that identifies an enterprise. In most countries, trade names may be registered with a government authority. However, under Article 8 of the Paris Convention for the Protection of Industrial Property a trade name must be protected without the obligation of filing or registration, whether or not it forms part of a trade mark. Protection generally means that the trade name of one enterprise may not be used by another enterprise either as a trade name or as a trade or service mark; and that a name or designation similar to the trade name, if likely to mislead the public, may not be used by another enterprise.

Geographical Indications

A geographical indication is a sign used on goods that have a specific geographical origin and possess qualities or a reputation that are due to that place of origin. Agricultural products typically have qualities that derive from their place of production and are influenced by specific local factors, such as climate and soil. Whether a sign functions as an indication is a matter of national law and consumer perception. Geographical indications may be used for a wide variety of agricultural products, such as “Tuscany” for olive oil produced in a specific area of Italy, or “Roquefort” for cheese produced in a certain region of France. The use of geographical indications is not limited to agricultural products. They may also highlight particular qualities of a product, which are due to human factors found in the place of origin of the products, such as specific manufacturing skills and traditions. That place of origin may be a village or town, a region or a country. An example for the latter is Switzerland or Swiss, which is widely perceived as a geographical indication for products that are made in Switzerland, in particular for watches.

An appellation of origin is a special kind of geographical indication, used on products that have a specific quality that is exclusively or essentially due to the geographical environment in which the products are produced. The concept of geographical indication encompasses appellations of origin. Examples of appellations of origin which are protected in states party to the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration include “Habana” for tobacco grown in the Havana region of Cuba, or “Tequila” for spirits produced in particular areas of Mexico. Geographical indications are protected in accordance with national laws under a wide range of concepts, such as laws against unfair competition, consumer protection laws, laws for the protection of certification marks or special laws for the protection of geographical indications or appellations of origin. In essence, unauthorized parties may not use geographical indications if such use is likely to mislead the public as to the true origin of the product. Applicable sanctions range from court injunctions preventing the unauthorized use, to the payment of damages and fines or, in serious cases, imprisonment.

Protection Against Unfair Competition

The Paris Convention for the Protection of Industrial Property, Article 10bis, requires its member countries to provide protection of industrial property against unfair competition. This article is directed against acts of competition that are contrary to honest practices in industry or commerce. The Paris Convention lists the following as acts of unfair competition in relation to industrial property:

all acts of such a nature as to create confusion with the establishment, the goods or the industrial or commercial activities of a competitor;

false allegations in the course of trade of such a nature as to discredit the establishment, the goods or the industrial or commercial activities of a competitor; and/or

indications or allegations, the use of which in the course of trade are liable to mislead the public as to the characteristics of certain goods.

Protection against unfair competition supplements the protection of inventions, industrial designs, trade marks and geographical indications. It is particularly important for the protection of knowledge, technology or information which is not protected by a patent but which may be required in order to make the best use of a patented invention.

Instruments and International Agreements for the Protection of Industrial Property